Fractional growth for 2006

[Crossky]

I have a question for you and others who may care to add...What is a fair pay for us fractional pilots? Us at Shares and NJ just received a very nice pay raise. Hopefully Options and Flex will be soon to follow. I am quite happy with my salary as a Captain flying a light jet around while having half of the year off. This is typical of NJW to still complain even after her husband received a nice raise. It sounds like a smack in the face to your beloved union that fought to get NJ the raise and to your hubby and his buddies that voted it in. Remember, our companies are NOT in business to give us a job, they are in business to make money. If the pay is that bad for us pilots in the fractional world, please enlighten where I can go and make more money only working half a year. Be grateful for what you have for once.

""Here's looking at you Kid . . . ""

Good one, I totally agree. If you don't get what you're worth, you get what you can negotiate. Now, the Regionals are in a pretty poor position compared to the Frac's I must say (painfully obvious point). Granted regionals hire FO's at less experience but RJ CA's usually have as much experience as Fractional CA's and make 30K less annually.

Anyone flying for a fractional is in a good place right now. I hope you're able to keep up what you have. However, the ironic thing is most Frac's don't post a net profit yet you're won excellent gains in pay lately, and most regionals are still netting tens of millions a year in profits while their pilots are enduring concessions, whipsaws, and the like. I hate to use the phrase 'borrowed time' in regard to the Frac's but I do wish Fractional pilots the best for the future.

 

[BluDevAv8r]

""Here's looking at you Kid . . . ""

Good one, I totally agree. If you don't get what you're worth, you get what you can negotiate. Now, the Regionals are in a pretty poor position compared to the Frac's I must say (painfully obvious point). Granted regionals hire FO's at less experience but RJ CA's usually have as much experience as Fractional CA's and make 30K less annually.

Anyone flying for a fractional is in a good place right now. I hope you're able to keep up what you have. However, the ironic thing is most Frac's don't post a net profit yet you're won excellent gains in pay lately, and most regionals are still netting tens of millions a year in profits while their pilots are enduring concessions, whipsaws, and the like. I hate to use the phrase 'borrowed time' in regard to the Frac's but I do wish Fractional pilots the best for the future.

I see what you are trying to say but the comparison is apples to oranges really. Two entirely different business models based on different economic pressures and customers. A regional's customer is the mainline carrier (some of whom are in BK) and that mainline carrier has a finite amount of business that they are going to throw up in the air and see who jumps highest for it while the fractional's customer is a multitude of private individuals and corporations all of whom choose their fractional provider based on service, reliability as well as the all-important "cost."

This could make for an interesting discussion however.

-Neal

 

[Anis]

Are you people on drugs? The fractionals have lost money since their existence and you all all thinking everything is fine.quote]

And you are....?

 

[Anis]

Netjets wife, you sound like a conspiracy theorist. I am not buying it, money being hidden offshore. Based on your logic, NJ will announce a profit at the end of their fiscal year. I will be looking out for that. I don't want to see anyone lose their jobs but lets get real. There is only a finite amount of multimillionaires out there who will join the frac fleet and while it is growing it ain't showing a profit. Why is that. I heard that in the frac biz, you do not take delivery of an airplane until the shares are sold in order to be able to pay for the aircraft. If that is the case, it is a good rule to follow but still no profits. Granted, there will be a shakeout and only the strong will survive in the end and I guess my moneye would be on NJ to be left standing and then they will have price control. And if this business model is so wonderful, why hasn't wall street jumped on the bandwagon considering Warren Buffet is a major stakeholder as well as a shareholder. Wall street follows the oracle of omaha to hopefully cash in with him. On the frac business they aren't sold.

all generalities, no detail...

 

[Anis]

When one uses common sense a conspiracy theory isn't needed, Capt Z. NJ Inc. openly chose to put their profits into world-wide expansion rather than pay the pilots professional wages. Perhaps the new CBA will slow down the overseas growth rate. I don't know. That remains to be seen, but I can tell you that the NJ pilots weren't pleased to see NJ Scotland started up while the company was telling the pilots they couldn't afford to pay fair wages. Here's two questions for your list, Zero: During contract negotiations, why did the company resist all efforts to give the NJA pilots a full financial disclosure if they were such an unprofitable company? I take it you've never seen a shell game or heard of corporate greed?


Don't let the "doom and gloom" crowd shake your confidence, frac pilots. Your companies pay all the other necessary costs of doing business. Make them add your compensation to the list of requirements. Here are the questions that seem more relevant to me: Which one of us on this board actually thinks that management settles for far less than they believe they're worth? They aren't having a problem paying their own salaries, so why should the pilots be underpaid and overworked?

Ooooh, yeah...with all due respect...this isn't a thread about overpaid execs and underpaid pilots. Back on track, please...

 

[Anis]

""Here's looking at you Kid . . . ""

Granted regionals hire FO's at less experience but RJ CA's usually have as much experience as Fractional CA's and make 30K less annually.

Kid, you're gonna have to show me the data on that one...I know Captains at Regionals who have topped out, and miss the mark by (roughly) 20K from Frac pilots. Again, generalities - not proven details. This is why we'll drive metal for our whole life.

 

[gunfyter]

Show me in black and white where NJ, CS, Flex or Flops is making money.

Yes it is in Black and White in the Berkshire annual reports that NJA has made profits.

 

[netjetwife]

I have no objection to overseas expansion, as long as, it doesn't come at the expense of the pilots and their families. Frac companies should pay the pilots they already have on staff, like the professionals they are, before hiring others.

 

[Nixon]

Yes it is in Black and White in the Berkshire annual reports that NJA has made profits.

from the Bershire Hathaway 2004 annual report (the latest one available at berkshirehathaway.com):

NetJets earned a modest amount in the U.S. last year. But what we earned domestically was largely offset by losses in Europe. We are now, however, generating real momentum abroad. Contracts (including 25-hour cards that we ourselves market in Europe) increased from 364 to 693 during the year. We will again have a very significant European loss in 2005, but domestic earnings will likely put us in the black overall.

The 2005 annual report will be posted at their web site later today.

 

[netjetwife]

In other words, NJA was carrying NJE. Their European counterparts were being subsidized by the American pilots that were paid less, although they generated more profit for the company. How much do you suppose a conglomerate like BH considers to be a "modest" amount?

I won't be surprised if NJA is free to report a greater profit now that the contract dispute is settled. If they don't, it's not because they aren't. It will mean that NJ Inc is still using NJA to carry their other companies. It should be easy enough for them to continue that unfair practice. After all, not all of the NJ pilots receive the professional wages that are their due. It is my hope that Flt Ops pilots will be able to raise the bar for the FOs in the industry. If each frac group takes a turn pulling, eventually, you'll all be able to stand on the high ground together.

 

[dime line]

Any of you who think that FLOPS, FLEX and Citation Shares are loosing money, prove it.

 

[gunfyter]

I would think NJ will show massive losses for 2005... due to the delay in getting the contract done with selloffs ... and having to pay many millions in back pay/ signing bonuses. This will not be a Normal year though.

 

[WillFlyFoCookie]

I believe over the course of the entire history of airlines in the United States there is a net loss....and that's with 50 years of government price regulation. I think running airplanes is one expensive business and that companies and individuals do it because those shiney jets are just so darn sexy!

 

[Nixon]

Warren Buffett's Annual Letter to Shareholders

The NJA pilots know the business made lots of money. The profits just weren't kept in America.

From Warren Buffett's Annual Letter to Shareholders (28 Feb 06):

Operating results at NetJets were a different story. I said last year that this business would earn money in 2005 – and I was dead wrong.

Our European operation, it should be noted, showed both excellent growth and a reduced loss. Customer contracts there increased by 37%. We are the only fractional-ownership operation of any size in Europe, and our now-pervasive presence there is a key factor in making NetJets the worldwide leader in this industry.

Despite a large increase in customers, however, our U.S. operation dipped far into the red. Its efficiency fell, and costs soared. We believe that our three largest competitors suffered similar problems, but each is owned by aircraft manufacturers that may think differently than we do about the necessity of making adequate profits. The combined value of the fleets managed by these three competitors, in any case, continues to be less valuable than the fleet that we operate.

Rich Santulli, one of the most dynamic managers I’ve ever met, will solve our revenue/expense problem. He won’t do it, however, in a manner that impairs the quality of the NetJets experience. Both he and I are committed to a level of service, security and safety that can’t be matched by others.

Nixon

 

[gunfyter]

Nixon,

This is no surprise for 2005.

"...solve our revenue/expense problem."

DONE! All he had to do was settle the pilot's contract. As an examply I have already flown a many hours in the last 3 months since the contract was finished as I had for the 6 months prior. A 100% increase in pilot productivity. Flying 55 hrs last tour alone.